As Jet remains grounded, Indian airlines are increasing their fleets to rein in surging ticket prices
- Last week, a cash-starved
Jet Airwaysdecided to temporarily suspend operations after its creditors refused to give into its requests for emergency funding.
- In the immediate aftermath of the move, domestic
airfaressurged by as much as 200% owing to capacityconstraints and the fact that a number of prime flight slots were now empty.
- As they get Jet’s flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their flight commitments.
Last week, a cash-starved Jet Airways decided to temporarily suspend operations after its creditors refused to give into its requests for emergency funding.
In the immediate aftermath of the move, domestic airfares surged by as much as 200% owing to capacity constraints and the fact that a number of prime flight slots were now empty.
This only served to hurt consumers, as they were forced to book flights at high prices while waiting for refunds from cancelled flights.
That was expected. But even before Jet’s grounding, the Directorate General of Civil
As 90% of Jet’s slots were unused, the process of allocating them to other airlines was also underway.
As they get more flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their increased flight commitments.
In fact, instead of a planned addition of 80 planes at domestic carriers, the number has recently been increased to 150 - a third of which will be added at market leader Indigo.
Jet’s suspension is expected to last until the creditor-led bidding process for a majority stake in the airline is completed. However, if the bidding process fails to unearth a serious bidder - which is a possibility given the fact that Jet isn’t operational - the airline might have to undergo liquidation proceedings.
Jet Airways might fly for the last time tonight and that's bad news for travellers
Jet needs emergency funding of ₹4 billion to stay airborne until a buyer swoops in
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